ITC Litigation: Section 337 Investigations

At Agility IP Law, we are experts at ITC patent litigation under Section 337. Firm founder Jim Otteson was the former Head of ITC Litigation at the Silicon Valley law firm Wilson Sonsini Goodrich & Rosati. In this role he acted as lead counsel at multiple ITC trials for both complainants (patent holders) and respondents (accused infringers), and has litigated numerous other ITC cases that resolved successfully before trial. Jim is an expert at distilling complex technical issues and making them understandable and compelling to decision-makers in the context of motions, Markman hearings, summary judgment and trial.

Representative Section 337 ITC Cases:

• Foam Footwear
• Non-Shellfish Derived Glucosamine and Products Containing Same
• Systems for Detecting and Removing Viruses or Worms, Components Thereof, and Products Containing Same
• Semiconductor Chips with Minimized Chip Package Size and Products Containing Same
• CD-ROM Controllers and Products Containing Same II

Technology and other products are increasingly manufactured overseas and then imported into the United States. This has led to the growing importance of the U.S. International Trade Commission (ITC) as a forum for the resolution of intellectual property disputes, especially patent infringement (which accounts for 95% of Section 337 cases).

The ITC handles IP disputes involving goods that are imported into the United States. The ITC's jurisdiction over these disputes is defined by Section 337 of the U.S. Tariff Act, which requires that the IP owner show the following: (1) the importation of a good that allegedly infringes a U.S. patent or some other IP right; and (2) a "domestic industry," which means that the IP owner must show an investment of labor, capital or other resources to exploit the IP in the U.S.

For a U.S. IP owner who can satisfy these requirements, the ITC is a uniquely powerful tool to wield against competitors. The ITC provides two special injunctive remedies in the event of a violation of Section 337: (1) an exclusion order; and (2) a cease and desist order. An exclusion order bars the importation of the infringing goods, and comes with a built-in enforcement arm: U.S. Customs officials, who will watch for and block the infringing goods at all ports of entry into the United States. An exclusion order is generally more effective than a U.S. district court injunction, which leaves the enforcement responsibility to the IP holder. After an infringement finding, the ITC also typically issues a cease and desist order, which bars the sale of inventories of the infringing goods that were previously imported into the United States.

The ITC also provides unique leverage for U.S. IP holders for another reason: speed. Typically, ITC cases are set for trial within 8-11 months after the filing of a complaint, which is an extraordinarily short amount of time to work up and try a complex patent infringement case. Obviously, this puts a tremendous amount of pressure on an accused infringer, both in terms of litigation defense and other resources.

Moreover, many of the normal discovery limits that exist in U.S. district court litigation do not apply in the ITC. For example, the parties in U.S. district court are normally limited to 25 written interrogatories (see, e.g., Fed. R. Civ. P. 33). However, the limits in the ITC are much higher. Depending on the presiding administrative law judge (ALJ), parties can serve at least 175 interrogatories on every other party, and it is common for parties to serve as many written discovery requests as they want. In addition, depositions in U.S. district court cases are usually limited to one day of 7 hours (see, e.g., Fed. R. Civ. P. 30(d)(1)). Depositions in ITC cases have no such limits, and can continue for multiple days absent a protective order from the presiding ALJ.

In part due to the speed of the forum, a much higher percentage of ITC patent cases go to trial - approximately 30-40%, as opposed to fewer than 5% of patent infringement cases in U.S. district court. Thus, it is critical for counsel in an ITC patent case to be experts in patent law, ITC procedure and trial practice. Counsel must also be proficient in the relevant technology, and be able to simplify complex technical concepts in order to make a compelling presentation to the presiding administrative law judge.